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Commodity price increase- are they sustainable?

Cereals
Wheat has just eased back in price from its recent highs but is still trading at close to £200/t delivered farm for the winter run. Pretty much all reports from all Governments and independent companies show a reduced crop throughout all of Europe and Australia due to the extremely dry and hot weather.
Maize still looks good value against other starch and energy sources at present. Sodawheat is also definitely worth considering for winter rations and contract prices currently look attractive at around £180 – £185/t for the winter delivered in artic loads. Barley is still extremely difficult to source and to put a price on. Hopefully this may change as more spring crops come off the field. Please bear in mind that grain markets and all feed markets are very volatile at present and prices quoted are only valid there and then!Proteins
An interesting market! The good news is that hipro soyameal prices have dipped recently, mainly over fears of swine flu in China which would see a dramatic reduction in demand depending on the scale of the problem. So far this has not affected other protein prices. The range of ‘mid proteins’ is limited with rapemeal prices remaining stubbornly high and a total lack of wheat distillers due to a planned shutdown at the Ensus Plant on Teeside. Vivergo in Hull is also rumoured to be closing at some point too. If this happens demand will outstrip supply for rapemeal but it may negatively affect the wheat price as the two plants take over 1m tonnes of wheat between them. In short, a difficult market to predict!Fertiliser
Nitrogen continues to move up in price at an alarming rate. Prices went up £20/t last week as CF and Yara raised their prices. There is very little competition from Imported AN as the traditional suppliers from Lithuania and Poland do not have excess capacity or tonnage to move so they are also happy to raise their prices and therefore their profits!

Despite this, there is a long time to go until next spring and prices currently aren’t tempting anyone to buy! This isn’t a surprise as historically prices are at the top end over the five year average. I can see the fertiliser market being very quiet over the next three or four months! Whether this leads to a reduction in prices only time will tell…

Joining Aspatria Farmers

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